Inside the Journeys headquarters in Nashville, Tenn., the walls are lined with framed moments in time: photos of its first store opening and its 500th, plaques commemorating when it cracked $1 billion in sales. But it’s the marketing memorabilia and promotional posters of rock tours the retailer sponsored over the years that stand out: Music has played a defining role.
In a moving conversation, the two talk about the retailer’s evolution, music and fashion, and catering to the increasingly savvy teen. (Journeys donates money to the foundation to support music and arts education in U.S. schools.)
For Estepa, though, the best tribute to the company’s rich history is to focus on the people who masterminded many of those moments decorating the company’s halls.
“We are blessed with having some of the best buyers, merchandisers and operational folks in the business,” said Estepa, president of Journeys and CEO of Genesco Inc.’s retail group. “Our buying team has been together for so long they have seen all the cycles.”
But few cycles have been as tricky as recent quarters, where all retailers are battling e-commerce competitors, rationed consumer spending and few dominant fashion trends.
In fact, when Journeys parent Genesco, which owns additional labels Lids, Schuh and Johnston & Murphy, reported a 4.6 percent decline in second quarter sales, the company stock paid a heavy price on Wall Street.
Some analysts downgraded the stock due to “fashion dislocation at Journeys,” yet most were still largely upbeat about the company’s long-term potential.
“While the swiftness of this particular shift [in trends] was a bit more brisk than in previous cycles, we are convinced that Journeys remains the premier fashion footwear destination for teens,” wrote analyst Steven Marotta of C.L. King & Associates.
Estepa, who has worked in retail for 46 years, said he has never been more invigorated by the challenges out there.
FN listens in.
Scott Goldman: For 30 years, you’ve had a chance to witness all manner of cultural movements, from retro and grunge to punk and even now genderless kinds of styles. How do you mix that into retail?
Jim Estepa: The team we have at Journeys has been together for the most part for all of those 30 years. In the past 30 years, we’ve only had a few years of comp losses. And those were caused by fashion rotational shifts. At one point, 45 percent of our business was done with two brands: Dr. Martens and Skechers during the grunge era. And then fashion changed and moved on to something else. Another big era for four or five years was skate. That became very big and then started to digress, too. But everything comes around. It comes around a little different than the first time, but it comes around.
SG: Are things coming around more quickly?
JE: About every three years, we start to see somewhat of a fashion shift. Now there are brands that have been iconic such as Vans and Converse who have stayed in our top brands for all of those years. Other brands ebb and flow. The kids decide. If we got a dollar every time a vendor came to our office and said they wanted to create the next great shoe for teenagers, we could retire. We don’t do that. We put the assortment together, and the kids draw out of it what they want.
SG: When the first Journeys store opened in 1986, malls were dominated by Benetton or Spencer Gifts, maybe a record store or two. How were you appealing to kids?
JE: Most of the footwear retailers back then were family stores, such as Kinney Shoes and Endicott Johnsons or they were male- and female-focused stores. All of them catered to the older customer. Nobody was truly focused on the teenager. And in 1986 we knew the demographics for the teen were going to be huge for the next decade. Our goal was to create a shoe store that focused on one thing and one thing only: teens.
SG: You had MTV playing in store. What else did you do to draw in teens?
JE: The store was electric in the way our overall design was. But the most important thing we did was to recognize our employees as individuals. Every other retailer back then had their employees wear uniforms. We allowed our employees to be themselves. They could wear jeans or shorts; they had orange hair, piercings. They even had tattoos. We’ve always said that our employee is in fact our customer. In those days, the malls were extremely nervous about the teenager. The kids looked a little different; they were a little too aggressive for the customers. What we did, because we were hiring lots of these kids in many of our stores, is we said to shopping center developers, “If you want to make malls a place for kids, which are going to be a big part of your business, you need to put all of the teen shops together.” Whether it was PacSun or The Buckle, we started locating teen stores together in one wing of the mall, and if you could get the developer to put a food court at the end of it, you hit a home run.
SG: Fast forward 30 years: What’s changed about the business and teens?
JE: The teenager has become much more astute to what’s happening. In the palm of their hand they have an answer to almost everything. They also instantaneously know what’s going on around the world. They know what celebrities are wearing and how they wear things. They are more inclined to not settle. They are looking for what they want when they want it. That forces retailers to be good at what they do.
SG: Lots of musicians are getting into the sneaker game. What’s your take on celebrities and their sneakers?
JE: It’s terrific. What you’re seeing with Kanye, Rihanna and even Kylie Jenner is that they represent a lifestyle as much as anything else. Whereas the athletes [symbolize] performance. There is a true difference between performance-related celebrities and lifestyle-related celebrities. And for us, what Kylie, Rihanna and Kanye are doing is very good for the fashion industry and is going to play very well. And it’s not just the products they endorse, it is the halo that those people have on the brands. You’re not only selling those signature shoes but the other shoes around them as well.
SG: As you said, kids have access to more information than any generation previously. On top of that, they are more aware of what the brands they are buying do to the world or for the world. How do you address that?
JE: I had an opportunity to go to Honduras with Toms, and when I got back I was talking to founder Blake Mycoskie to see what we could do on an additional level. One thing he said that stuck with me was to try to keep it local — do what you can for the local community. The first thing we did was to authorize eight hours of pay for every store manager and assistant manager that they could use to go give back to the community. We’ve also been involved with our parent Genesco with a program called Cold Feet Warm Shoe, where we go to local schools here in town and fit hundreds of kids with shoes. We do lots of other things, but it’s all part of giving back, and I think consumers recognize that.
SG: Getting back to music, why has it always been such an important part of the Journeys brand?
JE: Because music is a critical part of the growth of the teenager. All of us love music, whether we are 8 or 80. When we opened the first store in 1986, we ran music videos, and we’ve since been around it in a lot of different ways. As you know, we’re affiliated with the Grammy Foundation. We also are the premier sponsor of the Vans Warped Tour; we do 40 different stops with Vans. We also have spring and fall tours we do ourselves, and that gives us an opportunity to activate music 12 months out of the year.
SG: What were some of your early musical sponsorships?
JE: Early on, when skate was important, we embarked on a program called the Backyard Barbecue. It was part of giving back to the community; we would bring all the action sports athletes to a parking lot in a shopping center several times a year, along with several major bands and have a free concert and free action sports demonstration in these communities. We did that for several years, but as skate slowed down, we decided to do some different things.
SG: How do those partnerships, whether it’s with Vans or the Ascend Amphitheater, build the brand profile?
JE: More than anything else, it authenticates our relationship. As you look at social media today, which is becoming a big part of what we do, gathering content and being where the customer thinks you belong is critical. At the Ascend Amphitheater, which we sponsor along with the Journeys Concert Series, it’s good for our consumers, but it is good for our employees. We can bring 24 employees to every one of these 30-plus concerts. Everything we do has an employee piece. You’ve got to have your employees engaged; if they are, they understand how important they are to you.
SG: Switching gears a bit, there are so many other types of retail today: big-box, e-commerce and Amazon. How are you fighting back?
JE: We’ve been able to grow our store base while also growing our e-commerce base. There is opportunity in both at the same time. What’s interesting is that today, whether it’s Amazon or Zappos, everybody has raised the bar. That means you have to be even better at what you do. We produce a lot of shoes, about 25 to 30 percent of our assortment is available only at Journeys. With our partners, we have product that is for us exclusively, that is not available across the mall.
SG: The economy hasn’t been great for teens these days, from fewer jobs to parents curbing spending. Are you concerned about that?
JE: We’ve had a lot of success for the 30 years we’ve been in business. We try hard not to spend time on things we can’t control. I want to focus on the things we can and do better. Even though the economy is choppy and everyone is concerned with what’s going on around the world and with the election, when you have the right product, the kids find it and they buy it. And it’s not an issue. We are charged in our industry with cultivating product that is relevant, that kids want to buy today. If we do that together with our partners, then we are going to be just fine.